Automotive Products

AT 0300

Multi Utility Vehicles

Multi-utility vehicles (MUVs) or sports utility vehicles (SUVs) and multi-purpose vehicles
(MPVs) as variously styled (with minor variations), are considered as youthful and trendy modes
of transport used for field work, excursions, adventure motoring and the like. The vehicles are
known for their ruggedness and are suitable for rough and non-motorable terrains. These are more
conveniently motorable where the more sophisticated passenger cars would find it difficult to ply.
MUVs are generally 4-wheel drives and over the years have progressed from jeeps and vans
to more versatile SUV wagons with seating capacities ranging from 5 to 13 passengers.
From two players (Mahindra & Mahindra and Maruti) till mid-1980s, the segment has seen a
steady stream of entrants. In mid 1990s, Bajaj Tempo (now Force Motors), Hindustan Motors and Tata
Engineering (now Tata Motors), jumped on the MUV bandwagon. Toyota-Kirloskar, conceived as a
joint venture, entered into the market towards the end of the 1990s. In the multi-purpose vehicles,
Mahindra & Mahindra and Maruti made an entry in the second year of the new millennium.
With the entry of global majors like Ford, General Motors, Honda and Hyundai, the

segment boasts of as many as ten players. However, Ford, Honda and Hyundai, along with the
indigenous outfit, Hindustan Motors, have only a token presence. Nevertheless, the global players
have drawn very ambitious plans to have a share in the MUV pie.
While, initially, the two players were involved mainly in jeep type vehicles, Tata Motors,
apart from its own jeep type vehicle, Sumo, came up with a van-type 4WD vehicle, Safari, and
emerged as the second largest producer in the segment. Maruti with its Gypsy was complemented
by the induction of Tempo Trax from Bajaj Tempo and Trekker from Hindustan Motors. Toyota
Kirloskar launched its own multi-utility vehicle, Qualis.
The segment has grown from strength to strength. The overall sales in the segment
increased from near 170,000 units in 2001-02 to over 309,000 units in 2006-07, registering in the
process a robust compounded annual growth of 12.7%. While the MUVs component has advanced
at 15.3% during the period, the MPV component has grown at a modest 6.2%. This underscores the
emergence of SUVs as trend-setters. During 2007-08, the segment registered a further 10% hike in
sales over that of 2006-07.
Market of multi-utility vehicles was estimated at Rs.111 bn in 2007-08 which meant an
increase of 12% over that of the preceding year.
The disquieting feature, however, is that the share of the segment in the overall market of 4wheeler passenger vehicles has dropped from 23.3% in 2001-02 to under 14% in 2007-08. This is
the result of a spurt in the market for passenger cars from around half a million in 2001-02 to a
million-and-a-half at the end of 2007-08.
With the economic slowdown witnessed globally, the segment has been witnessing reduced
sales since August 2008. Considering the overall impact on the entire auto industry segments, the
MUV segment is in for a jolt.
As indicated, Mahindra & Mahindra with a share of 30% in 2006-07 (down from 32.5% in the
previous year) is the market leader, with Maruti-Suzuki following closely behind at 28% (up from
27%). Along with these, Tata Motors, Toyota, General Motors and Force Motors make up for over 95%
of the market. The balance of the market is shared by Ford, Honda and Hyundai. HM has been reduced
to an insignificant player in the segment. Mahindra & Mahindra, over the years launched several models
like Quadro, a sporty vehicle, intended to remain a limited edition vehicle, sold on Internet. It did not do
well on its Voyager produced under a technical collaboration with Mitsubishi.
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Tata Motors had launched a stripped down version of Sumo priced marginally lower with
three variants, Sumo-SE (low-priced variant), standard and the DX version.

With the removal of quantitative restrictions under the WTO dispensations, the MUV

segment has become very active. As a result, the market is swayed with a variegated array of
models. While Maruti continues with its Versa and Omni MUVs, Ford has its mini SUV Fusion and
Endeavour, General Motors has done well with its Tavera and Forster (a late entry). Toyota is
phasing out its Qualis, and is building on Innova and Land Cruiser, Prado. Tata has Safari Dicor
and Sumo Victa/Spacio; and M&M is going strong with its Scorpio and Bolero/Invader. Honda
with CR-V has managed to create a foothold, while Hyundai with its Tucson and Mitsubhishi is
trying to market Pejero.
The future, the meltdown of 2008 notwithstanding, holds a good promise for the segment

with the established position and new plans. Volvos debut into India is marked by the launch of
XC90 SUV as a completely built unit. In mid-2007 the vehicle was undergoing homologation at
Automotive Research Association of India (ARAI), Pune. The SUV was to be marketed in an
arrangement with Ford India. Volvo has also lined up as a compact SUV, besides XC90, for a
launch in 2009.
Hondas foray into SUV segment was through its CR-V in 2006. The company had

managed to sell about 1900 units in 2006-07. GM, which has its Tavera-SUV, is expecting to
register bulk sales (24,000) in 2007.
M&M was to launch a new SUV from its facility at Chennai as the result of its tripartite

venture with Nissan and Renault. The facility is to have a capacity to produce 400,000 units
annually. The production is expected to start in second half of 2009. Earlier, M&M had decided to
pitch its Bolero as an entry level vehicle. Besides, it has planned to set up a multi-utility vehicles
unit in Pune-Nashik belt in Maharashtra. M&M invested Rs 7 bn in the Nashik plant for its Renault
offering Logan and another Rs 6 bn for a facility to produce new models of MPVs to compete with
Innova and Tavera. The project to make new SUVs termed as Ingenio. The vehicle variants under
the project were to hit the market in 2008. M&M had invested Rs 300 mn in 2006 to increase the
capacity for the production of SCORPIO from 3000 to 4000 vehicles a month.
Nissan entered India in 2004 with its SUV X-Trail and has been averaging sales of 250

units a year. So far these are imported as fully CBUs with an aim to build brand image in India.
Once the facility at Chennai is operational, the SUV will be produced in India.
Tata Motors launched a new entry-level utility vehicle, named Spacio Gold Plus. Fitted

with a Diengine, the vehicle is slated to enhance customer experience. The Spacio Gold Plus would
be available in 6+driver and 8+driver versions. It is the revised version of the entry level Sumo,
which had recorded a growth in sales of 26.4% in 2006-07 (48,000 units).
Once its CKD assembly plant at Aurangabad in Maharastra is up, Audi is likely to put its

Q7 SUV in the Indian market. Audi, which is owned by Volkswagen, intends to use the facility
jointly with Volkswagen and Skoda.
Not to be left behind, Maruti-Suzuki launched its Grand Vitara SUV in mid-2007. The

vehicle is available in both manual and automatic transmission variants, priced at Rs 1.38 mn
brought as completely built unit from Japan. It marks Marutis fifth new product offering following
Wagon R Duo, Zen Estilo, Swift Diesel and SX4.
Sales turnover increased for most companies in 2007-08 and 2008-09. Net profit however,
declined in 2008-09. Maruti Suzuki sales rose by 12% in 2008-09 but net profit declined by 32%.
There are 15 players with a good sprinkling of global auto majors like Toyota, Honda,
General Motors, operating in the MUVs segment. Several models have been introduced. Available
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ones are: Tavera and Captiva (GM), Innova and Pardo (Toyota), Omini and Eeco (Maruti), X-Trail
(Nissan), CRV (Honda) and others, including BMW and Mercedes. The market is, however
dominated by Innova, Tavera and a few products from Mahindra & Mahindra and Tata Motors.
Most MUVs from overseas players have yet to make a significant dent in the market.
Post meltdown that pushed down the production by nearly 10.5% in 2008-09, the segment
rallied to record 24.3% and 16.8% growth in 2009-10 and 2010-11, respectively.

Newly Emerging Indicators

There has been a spate of new brand entries into the MUVs market. The more eyecatching
have been Ertiga by Maruti (touted as poormans Innova), Renault Duster, Ford EcoSport and
Honda Mobiloo.
Isuzu Motors, ventured with its SU MU-7 and Indias first multi-utility pick-up truck DMax space club. The former is deployed with Isuzus state-of-the-art diesel technology.
The top five best UV sellers, however, include: Belero, Mobilio, Innova, Ecosport, Ertiga.
Production of MUVs
Year

Nos

2009-10
2010-11
2011-12
2012-13
2013-14

424,791
534,183
370,945
564,928
477,300

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AT 0301

Multi Utility Vehicles

Demand : Past & Future

Year

Market Growth Rates

th nos

1990-91
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2024-25

37
131
170
167
210
247
267
310
345
335
420
490
520
560
530
580
625
675
720
850
920
1385

1990-91 2000-01
2001-02 2006-07
2006-07 2011-12
2011-12 2019-20
2019-20 2024-25

13.5%
12.8%
10.9%
7.4%
8.5%

Variation Coefficient

5.1%

Product Variation
Type
Diesel
Petrol

Company
Mahindra & Mahindra
Toyota Kirloskar
Tata Motors
General Motors
Maruti Suzuki
Others
Force Motors,
Hindustan Motors,
Honda Siel, Hyundai
BMW,VW, etc

Market Segmentation
Share(%)

North
East
West
South

90
10

Lead Players

Market Structure
Segment

Share (%)

36
11
33
20

Share (%)
56
18
11
7
2
6

Leading Brands
Gypsy,Safari, Bolero, ST, Indo, Eeco, Fusion, Endeavour, Tavera, Rhino, Scorpio, Xylo, Sumo Grande, Innova,
Aria, Xenon, BMWx series, Captiva, Pajero, Outlander, CRV, Santa Fe, Vitara, X-Trial, Trip, Gio, Maximo Mini
Van, Magic, Iris, Venture, Touareg, Yeti, Fortuner, Mentero; Merc HL, GL, R and G Class, Prado, LC; Audi, Q5,
Q7, Maruti Ertiga, Renault Duster, Ford EcoSport, Honda Mobilio
4

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